Well it's the world turned upside down, isn't it? It wasn't that long ago when the Chinese were starving by the million under the socialism of Mao. And now the USA, whose government is more socialist than that of Red China, and taking over more and more private industries every year, wants protection from their competition!

The US cannot continue to enjoy its former living standards by keeping going into debt to China, which is what has been happening, paying for TVs with paper money based on nothing. They have no right to a living standard based on producing nothing but debt and exporting inflation; and there is no reason why any policy should support such an end.

I live in Far North Queensland. People from Sydney, Melbourne and the mining communties come here and buy property they will never live in. They force the price up. The buildings they build not appropiate for the area and are ugly. They do little business investment in the area. The economic input is tourism where the shareholder of Hilton would probably make more than the housekeeper. So people are shut out of certain areas of the city dominated by those outsiders that buy property and those outsiders that stay there for holiday, backpacker labour and transient workers abound.

Get used to it, we may not have invented capitalism but we have fined tuned it. Reap what you sow.

agree Missus;

I think what Chris is vaguely implying we should do to buyers in China we should make standard practice domestically.

So I personally can't complain.

And I'm not so much threatened by China as the general investment/purchase practices China is being singled out for in general.

An interesting piece.

Rarely is there an article on OLO so replete with xenophobic innuendo, and so empty of specifics

"So just how liberal should the US and other Western nations be"

Is "liberal" now a dirty word?

"But as communist China seeks to flex its muscle, Western generosity may prove much less generous."

Generous? Was it generosity that drove us to take advantage of the economic benefits that China's cheap exports provided?

I didn't hear too many complaints from the previous government, that encouraging Australians to borrow to the hilt in order to snap up a new plasma TV for the spare room would lead to perdition.

In fact, I seem to recall that they took all the credit for the wonderful standard of living they provided us.

Generosity? Greed.

"How long do Western policy-makers believe they can avoid really tough decisions about China?"

And those "tough decisions" might be.... what? We won't win a trade war, that's for sure.

"And for how long will Australians tolerate much greater influence by Chinese who may have acquired their wealth within China’s dodgy political system?"

Is it our business, how they come by their money? Is it any of theirs, how we acquired ours?

"home buyers in Melbourne complaining of being frozen out of a tight housing market by Chinese purchasers who have no intention of living in their new properties"

Of course. No Australian would consider such a dastardly trick, would they? Unheard of, eh.

"The rise of China should be a major political issue in Australia"

Not really. It's business, that's all. The fear of communism is surely a 1950s thing.

"And where is Australia’s academic concern about a rising China?"

That's just scraping the barrel. Are we talking economies, politics or culture here?

"Dream on if one thinks that Western nations can compete with communist China."

Perhaps the author should be less concerned about competing with, than living alongside.

In the sixteenth century, India's GDP was 25% of the world economy, China's was also around 25%.

The world turns. We don't have inalienable rights.

Get used to it.

See the Missus, hi-ya from Bushbred.

If you've studied Aussie economics, you surely must have heard the terms pitstock politics and quarry economics.

Though many spit with fury when academics mention it, certainly it cannot be denied.

Indeed, they are terms that really go back to the early 19th century, or even further in the West, when both Vlaming and Dampier considered Western SouthLand, simply A Land in Need, and certainly not fit for white habitation.

Right now, whether we like it not, consider ourselves damned lucky that it was gold that first kept the bailiffs from our doorsteps, and now its China that's been doing the
same for us for years and years.

But certainly there are conscience troubles, especially for us Christians, who now have the problem of whether we should just keep old Communist China from our prayers, or with tongue in cheek just thank the Lord that China was granted so very little iron ore.

Oh, and I forgot, so very little coal.

Cheers, BB, Buntine, WA.

Perciles, you said "The world turns. We don't have inalienable rights.

Get used to it".

I have no problem with any nation rising. All I am arguing is that one nation, especially a communist one, should not receive most of the benefit while most others struggle.

Sure democracies have relied on some dodgy policies in recent years rather than hard policy decisions, but this does not rule out the need for policy adjustments in the future.

I do believe there will be a public backlash against China should it benefit most without playing by the same rules.

Chris,

the cold war is over.
You won!!

"I do believe there will be a public backlash against China should it benefit most without playing by the same rules."
Posted by Chris Lewis

Mr Lewis, I was pleased to read the article, as well as the first page of comments, but I'm confused over the meaning of 'by the same rules'.

Does that imply that an economically successful communist country should not be permitted to play the game of capitalism by the same rules as the capitalists that invented the game?

Hasn't rampant capitalism made its own bed over the past decade? About time we had a wake-up call IMHO.

When I went to Sydney last I was stood on a railway platform with camera overhead focused on my every move. A sniffer dog came up to me to check me out and I saw a row of policeman sweeping the platform to ensure all passengers got the sniff treatment. My heart nearly leapt out of my chest, in fact I do not think it ever returned to its original beat!

I got on the train and missed my stop due to a few reasons, one being I was traumatised. These Nazi demanded my driving license because I missed one stop. I replied "I was not driving the train" This angered them and their big red sweaty faces demanded "you must comply or we will call the real police". Over their shoulders I could see real police ransacking a kid’s backpack. Their next victim: a little old lady who didn't buy her $1.oo ticket.

Come election time I wanted to vote for real old fashioned left wing workers party, you know the ones that used to make employers take notice. All there was on offer were varying shades of white, I mean right. The champagne socialist took over the workers party as some sort of fashion statement a number of years ago. It seemed us workers had been broken up into little camps called multiculturalism and lost our collective voice. The rich said we were racist, though could never find a rich multicultural neighbourhood, funny that.

Of course we had to lose some freedoms because some horrific event occurred overseas, and of course this never used to happen before the internet, when the zing had left the news when it arrived some months later. However, good enough reason to filter the internet. Opinions, nah do not need them. Just cut and paste somebody else’s.

Rich capitalistic Chinese or Rich Capitalistic European? No difference, race has never been the issue. Just used to splinter us or weaken up so we can be exploited.

Communism, Fascism. What is the difference again?

Seano,

By the term 'the same rules', I refer to the reality that China has a number of advantages over Western societies such as control over worker demands, and strict rules on foreign ownership of its state companies.

I am basically arguing that in a world of more open trade, China's govt can shift its resources to wherever they are needed. Western societies, answerable to public debate and sectional interest groups, cannot do so.

Sure all nations are free to organise themselves in a way necessary to benefit from capitalism, yet Western societies are not merely capitalist as their govts must take account of many different needs and wants. In other words, a liberal democracy is hardly a match for communist state now comparatively rich in gross terms hell-bent on mercantile economic success.

I understand the approach taken by China. But I am an Australian (and a Westerner. I would simply be lying to suggest that all is well for Western nations as China rises and rises based on my intepretation of recent and near future trends. As a Westerner, there may need to be limits to how far we can support liberalism, even if it is somewhat hypocritical from myself (as a supporter of liberalism).

I hope that greater debate in Western countries does lead to a give and take scenario which help China move more in line with Western expectations and hopes. This would be far more preferable to any trade war.

Simple truth is that the West is now in a mess because it can not compete with such nations, although Western leadership has remained evident for the past 30 years through a greater relaince upon debt to boost trade and economic activity. However, such a reliance is now over as US debt levels will need to be addressed one way or another.

1. "China has a number of advantages over Western societies such as control over worker demands, and strict rules on foreign ownership of its state companies."

I suggest we continue to follow those rules as state ownership of Australian government companies is fairly strict too, while Hewlett-Packard et al. are free to setup manufacturing divisions in Australia or in China, depending on where the living costs and consequent labour costs work out the more economically viable.

2. "China's govt can shift its resources to wherever they are needed"

Capitalists refer to that as 'perfect mobility'.

3. "Western societies, answerable to public debate and sectional interest groups, cannot do so."

Capitalists refer to this as 'imperfect knowledge', but that's meant in jest. Sectional interest groups see my hourly day-shift rates at around $15 p/h for casual forklift operations. Naturally I am lucky to have them around to help me load trucks for my weekly rations.

4. "a give and take scenario which help China move more in line with Western expectations and hopes."

If we consider point #1 above, perhaps a g&t scenario which helps the 'west' move more in line with China's expectations might be more hopeful.

Also, I boycott Perth trains altogether purely because of the sniffer dogs and concur totally with The Missus on the communist/fascist statement. Sectional interest groups can sniff someone else's behinds if they have such a fetish for it.
This train don't stop there anymore.

Damn fine article Chris. Having spent some years in China myself, I agree with the thrust of your arguments.

Peter Hume states: "And now the USA, whose government is more socialist than that of Red China, and taking over more and more private industries every year, wants protection from their competition!"

This comment displays what I fear is becoming a common attitude among westerners.

The Chinese economy is more-or-less a western one, not really communist, and if it is, that's just because it's involved in similar protectionist stoushes that happen between western countries. After all, with all the multinationals operating in China and its extreme growth, it must be turning capitalist, right?

Wrong, naive and downright dangerous:

1. People can't buy property in China. It can be leased for a set period, but the government owns the bulk of land. This has dramatic implications for investment.

2. Unlike the Soviets, the Chinese cleverly allowed production to be opened up to commercial competition (with government assistance). However, other industries crucial to maintaining state influence and financial power remain firmly in government hands - media, telecommunications and in many cases port logistics remain government assets. Even technology and finance companies typically have boards comprised of party members.

3. The party apparatus extends into every industry. Senior business figures are expected to be party members.

4. Foreign investment in key Chinese assets are blocked. Can you give me examples of any major state industries in China that have a significant level of foreign ownership?

When the author speaks of playing by a different set of rules, he's right. In all human history, we haven't witnessed an economy of this scale being so centrally controlled. That will have ramifications for the future.

One point not made in the article though, was the notable absence of Chinese companies from the world's most recognised corporations. Chinese companies don't innovate or invest in R&D, because of rampant piracy at a domestic level, handicapping transitions to the international stage. Heavy state support handicaps their moves internationally because other countries distrust multinationals with such strong links to foreign governments.

I'm not so sure, Mr Lewis.

>>I have no problem with any nation rising. All I am arguing is that one nation, especially a communist one, should not receive most of the benefit while most others struggle.<<

Simply because in economic terms, we are powerless to do anything about it. Just as seventeenth century India, after allowing the East India Company to develop its export market, was powerless to halt the exploitation of its resources, and ultimately its domination by a foreign power.

Once the barbarians are inside the gates, all bets are off.

China's stalking horse was of course our willingness to put ourselves in hock to buy its increasingly sophisticated baubles. As has always occurred throughout history, the country - or business - that sets out to dominate a market in this way is able to squeeze out its competitors.

For recent examples, study the post-war economies of Germany and Japan, both of whom became technological powerhouses at the expense of industry in less afflicted countries.

>>Sure democracies have relied on some dodgy policies in recent years rather than hard policy decisions, but this does not rule out the need for policy adjustments in the future.<<

Not entirely sure what you refer to here. It was largely complacency that got us to where we are now.

>>I do believe there will be a public backlash against China should it benefit most without playing by the same rules.<<

Which "public" is that?

It will be many years before the Chinese public repeats Tienanmen Square. Prosperity - even relative prosperity - is a very powerful political sedative.

Any ideas that involve introducing them to western-style democracy are pretty pointless. Let's face it, we're becoming increasingly dirigiste ourselves, each day bringing in yet another nanny-state law, and giving the "authorities" ever-greater powers to slap our wrists for trivial acts.

Not a great incentive for mass political upheaval.

Our task should be to learn to conserve the things that are important to us, while living with the fact that we have little ability to have an impact on the way China evolves.

although i agree with much of the article, mainly to do with the continued expansion and domination of china; i was left with an underlying wariness about the pretext of much that was written.

it seemed to me that this article contained much antagonism towards a rising china as though it was a bad thing. much of this antagonism seemed to be directed at the fact that china is communist. is it not true that as the standard of living and participation on the world stage increases, so will the democractisation of the country. would it be more sensible to quell the economic prosperity of china or embrace it?

yes, china has monopolised the rare earths sector, holds a majority of US Treasury debt among other things, but with a country of that size it is inevitable that some results of its rise isn't going to be perfect.

just a last point, would the growth of this country be as it was without the continued demand from china? would we have staved off recession during the GFC? members of the resources sector has stated that at times the only demand was from china. without foreign people participating in our economy, could we ourselves at the moment hold up demand especially in the housing sector, and closer to home (and not to mean any offence), would our universities be as well off and able to hire as many people, without the direct fees from foreign students?

Why should anyone or any country fear the rise of China as the world's dominant economic or even military power?

China buys lots of iron and other resources from Australia.

Australia doesn't need a military to sell iron to the Chinese government.

China is not a belligerent nation. One can look at its track record with its surrounding neighbors since the end of WWII. Korea, Vietnam, Kashmir; even its internal states like Tibet, Taiwan or Mongolia.

The Han majority in China is a peace-loving culture interested in the betterment of humanity and the world.

No other culture has spent so much to try and foster understanding and tolerance among its people or treated the threatened earth's environment with care, concern and respect as much as China.

Even the US benefits economically from the high-quality, high-value goods fairly produced in China.

The best thing that Australia could do would be to deepen its economic and political ties with China.

That way Australians can sleep peacefully at night.

So long as Australia stays nuclear-free and avoids any involvement with America, Australians are safe.

Australia can only stay safe from Chinese threats by making sure not to have any military force, and to stay away from the domineering Americans.

Chinese nukes or military power can only be used against Australians if America is involved, never in any other scenario. Australia needs China. Otherwise it can't sell its iron and can't have a better life.

China needs Australia as a friend and ally because it is the only way it could ever have the resources it needs to develop. Hopefully China will invest more in Australia as it has in Africa thereby improving the free and independent nation of Australia.